THE MEMBERS OF
PCBL LIMITED (FORMERLY PHILLIPS CARBON BLACK LIMITED))
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of PCBL Limited(formerly Phillips Carbon Black Limited) ("the Company") which comprise theBalance sheet as at March 31 2022 the Statement of Profit and Loss including theStatement of Other Comprehensive Income the Cash Flow Statement and the Statement ofChanges in Equity for the year then ended and notes to the standalone financialstatements including a summary of significant accounting policies and other explanatoryinformation.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2022 its profitincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.
BASIS FOR OPINION
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the 'Auditor'sResponsibilities for the Audit of the Standalone Financial Statements' section of ourreport. We are independent of the Company in accordance with the 'Code of Ethics' issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the standalone financial statements.
KEY AUDIT MATTERS
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the financial yearended March 31 2022. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. For each matter below our description ofhow our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone financial statements section ofour report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the standalone financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying standalone financial statements.
|Key audit matters ||How our audit addressed the key audit matter |
|Provisions for claims & litigations and disclosure of contingent liabilities (as described in Note 11.1 and 24 of the standalone financial statements) || |
|The Company is involved in litigations both for and against the Company comprising of tax matters legal compliances and other disputes. ||Our audit procedures included the following: |
| || We evaluated and tested the Company's processes and controls for monitoring of such claims litigations disputes compliances and assessment thereof for determining the likely outcome. |
|The Company assesses the need to make a provision or disclose a contingency on a case-to-case basis considering the underlying facts of each matter in consultation with its advisors and lawyers. This involves a high level of management judgement and assumptions which impact the risk assessment and consequential provisioning and disclosure of contingencies in the financial statements. || |
| || We read the summary of the litigations prepared by the management and discussed the material cases to determine the Company's assessment of the likelihood and magnitude of any liability that may arise. |
| || We obtained independent legal confirmations from the concerned lawyers where applicable to seek their opinion on the status of such litigations and validate the management judgement and assumptions. |
|This area is significant to our audit since the completeness and accuracy of accounting and disclosures for contingencies is dependent on such management judgement and assumptions. || We discussed with the management including the Company's internal tax experts and head of legal matters to understand the basis of management's judgements and estimates. |
| || We obtained risk assessment of tax litigations from our tax specialists to assess management's judgements and assumptions on such matters. |
| || We read the minutes of the board meetings and tested the Company's legal expenses to determine the completeness of claims disputes and litigations. |
| || We tested the adequacy of disclosures in the Ind AS financial statements. |
| || We also obtained necessary representation from the management in regard to provisioning and disclosure in respect of the claims and litigation. |
|Fair Valuation of investments in unquoted equity and preference shares (as described 4(a) of the standalone financial statements) || |
|The Company has fair valued its non-current investments in unquoted equity and preference shares of few companies as at the year end. ||Our audit procedures include the following: |
| || We obtained the last audited financial statements for the year ended March 31 2021 and the unaudited |
|Determining the fair value of such unquoted investments requires valuation techniques which has been performed by independent valuation experts applying applicable valuation methodologies. ||management certified trial balance for the year ended March 31 2022 where relevant of the investee companies and traced the composition of the net asset value of such investee companies used in fair valuation exercise to the same. |
|These investments being material to these financial statements was determined to be a key audit matter in our audit. || We read such financial information to determine any matters which should have been considered for the valuation exercise and discussed with the management for the year ended March 31 2022 if there are any other significant developments since the last audited financial statements. |
| || We compared the fair valuation of such investments as on March 31 2022 with the fair valuation as on March 31 2021 and discussed with the concerned valuer and the management the reasons for changes to such fair valuation. |
| || Further we obtained Independence confirmation from the concerned valuers and assessed their competence. |
| || We also obtained suitable management representation as regards the fair valuation of these investments. |
We have determined that there are no other key audit matters to communicate in ourreport.
INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON
The Company's Board ofDirectors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report Business Responsibility ReportCorporate Governance and Shareholder's Information but does not include the standalonefinancial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether such other informationis materially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
RESPONSIBILITIES OF MANAGEMENT FOR THE STANDALONE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding ofinternal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsfor the financial year ended March 312022 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order 2020 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
(b) I n our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
(c) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;
(d) I n our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;
(e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312022 from being appointed as a director in terms of Section 164 (2) of theAct;
(f) With respect to the adequacy of the internal financial controls with reference tothese standalone financial statements and the operating effectiveness of such controlsrefer to our separate Report in "Annexure 2" to this report;
(g) In our opinion the managerial remuneration for the year ended March 31 2022 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 11.1 and Note 24 to thestandalone financial statements;
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company
iv. a) The management has represented that to the best of its knowledge and belief asdisclosed in the note 33 to the standalone financial statements no funds have beenadvanced or loaned or invested (either from borrowed funds or share premium or any othersources or kind of funds) by the Company to or in any other person or entity includingforeign entities ("Intermediaries") with the understanding whether recorded inwriting or otherwise that the Intermediary shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Company ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;
b) The management has represented that to the best of its knowledge and belief asdisclosed in the note 33 to the standalone financial statements no funds have beenreceived by the Company from any person or entity including foreign entities("Funding Parties") with the understanding whether recorded in writing orotherwise that the Company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures performed that have been considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (a) and (b) contain any materialmisstatement.
v. The dividend declared or paid during the year by the Company is in compliance withsection 123 of the Act.
Annexure 1' referred to in paragraph under the heading "Report on otherlegal and regulatory requirements" of our report of even date Re: PCBL Limited(formerly Phillips Carbon Black Limited) ("the Company")
In terms of the information and explanations sought by us and given by the company andthe books of account and records examined by us in the normal course of audit and to thebest of our knowledge and belief we state that:
(i) (a) (A) The Company has maintained proper records showing full particularsincluding quantitative details and situation of Property Plant and Equipment.
(B) The Company has maintained proper records showing full particulars of intangiblesassets.
(b) All the Property Plant and Equipment have not been physically verified by themanagement during the year but there is a regular programme of verifying them once inthree years which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. No material discrepancies were noticed on such verification.
(c) The title deeds of all the immovable properties (other than properties where theCompany is the lessee and the lease agreements are duly executed in favour of the lessee)are held in the name of the Company.
(d) The Company has not revalued its Property Plant and Equipment (including Right ofuse assets) or intangible assets during the year ended March 312022.
(e) As represented to us by the management there are no proceedings initiated or arepending against the Company for holding any benami property under the Prohibition ofBenami Property Transactions Act 1988 and rules made thereunder.
(ii) (a) The inventory has been physically verified by the management during the yearexcept for inventories lying with third parties. In our opinion the frequency ofverification by the management is reasonable and the coverage and procedure for suchverification is appropriate. Discrepancies of 10% or more in aggregate for each class ofinventory were not noticed. Inventories lying with third parties have been confirmed bythem and discrepancies of 10% or more in aggregate for each class of inventory were notnoticed in respect of such confirmations.
(b) As disclosed in note 10 (a) to the financial statements the Company has beensanctioned working capital limits in excess of Rs. five crores in aggregate from banksduring the year based on the security of current assets of the Company. Based on therecords examined by us in the normal course of audit of the financial statements thequarterly returns/statements filed by the Company with such banks are in agreement withthe books of accounts of the Company.
(iii) (a) During the year the Company has not provided loans advances in the nature ofloans stood guarantee or provided security to companies firms Limited LiabilityPartnerships or any other parties. Accordingly the requirement to report on clause3(iii)(a) of the Order is not applicable to the Company.
(b) During the year the Company has not provided guarantees and security and notgranted advances in the nature of loans to companies firms Limited LiabilityPartnerships or any other parties. The investments made and the terms and conditions ofthe loans granted are not prejudicial to the Company's interest.
(c) The Company has not granted loans and advances in the nature of loans to companiesfirms Limited Liability Partnerships or any other parties. Accordingly the requirementto report on clause 3(iii)(c) of the Order is not applicable to the Company.
(d) There are no amounts of loans and advances in the nature of loans granted tocompanies firms limited liability partnerships or any other parties which are overduefor more than ninety days.
(e) There were no loans or advance in the nature of loan granted to companies firmsLimited Liability Partnerships or any other parties. Accordingly the requirement toreport on clause 3(iii)(e) of the Order is not applicable to the Company.
(f) The Company has not granted any advances in the nature of loans either repayableon demand or without specifying any terms or period of repayment to companies firmsLimited Liability Partnerships or any other parties. As disclosed in note 4 (e) to thefinancial statements the Company has granted loans repayable on demand to a company. Ofthese following are the details of the aggregate amount of loans granted to promoters orrelated parties as defined in clause (76) of section 2 of the Companies Act 2013:
| ||Amount in INR crores All Parties - Related Parties |
|Aggregate amount of loans/ advances in nature of loans - Repayable on demand ||6.19 |
|Percentage of loans/ advances in nature of loans to the total loans ||100% |
(iv) There are no loans investments guarantees and security in respect of whichprovisions of sections 185 and 186 of the Companies Act 2013 are applicable andaccordingly the requirement to report on clause 3(iv) of the Order is not applicable tothe Company.
(v) The Company has neither accepted any deposits from the public nor accepted anyamounts which are deemed to be deposits within the meaning of sections 73 to 76 of theCompanies Act and the rules made thereunder to the extent applicable. Accordingly therequirement to report on clause 3(v) of the Order is not applicable to the Company.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to the manufacture and sale of carbonblack and sale of power and are of the opinion that prima facie the specified accountsand records have been made and maintained. We have not however made a detailedexamination of the same.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including goods and services tax provident fund employees' stateinsurance income-tax sales-tax service tax duty of customs duty of excise valueadded tax cess and other statutory dues applicable to it. According to the informationand explanations given to us and based on audit procedures performed by us no undisputedamounts payable in respect of these statutory dues were outstanding at the year end fora period of more than six months from the date they became payable.
(b) The dues of goods and services tax provident fund employees' state insuranceincome-tax sales-tax service tax duty of custom duty of excise value added tax cessand other statutory dues have not been deposited on account of any dispute are asfollows:
|Name of the statute ||Nature of the Dues ||Amount (In crores) ||Period to which the amount relates ||Forum where the dispute is pending |
|Income Tax Act 1961 ||Income tax ||11.81 ||F.Y. 2017-2018 ||Commissioner of Income-tax (Appeals) |
|Central Excise Act 1944 ||Excise Duty ||1.26 ||1997-98 to 1998-99 2003-04 to 2008-09 2012-13 to 2015-16 ||Commissioner (Appeals) |
| || ||45.32 ||2004-05 to 2016-17 ||Customs Excise and Service Tax Appellate Tribunal |
| ||Excise Duty ||0.91 ||2011-2012 ||High Court at Gujarat |
|Central Excise Act 1944 read with Cenvat Credit rules 2004 ||Excise Duty ||5.77 ||2008-09 & 2010-2015 ||Customs Excise and Service Tax Appellate Tribunal |
| ||Excise Duty ||19.17 ||2008-09 2009-10 2010-112011-12 2012-13 2013-14 2014-15 2015162016-17 ||High Court at Calcutta |
| ||Service Tax ||6.02 ||2012-13 ||Customs Excise and Service Tax Appellate Tribunal |
|Central Sales Tax Act 1956 ||Central Sales Tax ||1.91 ||1994-951995 961999-00 ||High Court at Calcutta |
| || ||1.39 ||2007-08 ||Senior Joint Commissioner Commercial Taxes. |
| || ||4.48 ||2003-04 2004-05 ||West Bengal Commercial Taxes Appellate & Revisional Board |
|Customs Act 1962 ||Customs Duty ||0.09 ||2009-10 2012-13 ||Customs Excise and Service Tax Appellate Tribunal |
| || ||0.38 ||2006-07 to 2010-11 ||Deputy Commissioner of Custom |
|Gujarat Value Added Tax Act 2006 ||Value Added Tax ||0.23 ||2006-07 ||Gujarat Value Added Tax Tribunal |
|West Bengal Sales Tax Act 1994 ||Sales Tax ||0.67 ||2003-04 ||West Bengal Commercial Taxes Appellate & Revisional Board |
| || ||0.41 ||1994-95 to1995-96 1999-00 ||West Bengal Taxation Tribunal |
|West Bengal Value Added Tax Act ||Value ||2.62 ||2015-16 ||West Bengal Taxation Tribunal |
|2003 ||Added Tax ||0.78 ||2007-08 ||Senior Joint Commissioner Commercial Taxes. |
(viii) As represented to us by the management the Company has not surrendered ordisclosed any transaction previously unrecorded in the books of account in the taxassessments under the Income Tax Act 1961 as income during the year. Accordingly therequirement to report on clause 3(viii) of the Order is not applicable to the Company.
(ix) (a) The Company has not defaulted in repayment of loans or other borrowings or inthe payment of interest thereon to any lender.
(b) As represented to us by the management the Company has not been declared wilfuldefaulter by any bank or financial institution or government or any government authority.
(c) Term loans were applied for the purpose for which the loans were obtained.
(d) On an overall examination of the financial statements of the Company no fundsraised on short-term basis have been used for longterm purposes by the Company.
(e) On an overall examination of the financial statements of the Company the Companyhas not taken any funds from any entity or person on account of or to meet the obligationsof its subsidiaries associates or joint ventures.
(f) The Company has not raised loans during the year on the pledge of securities heldin its subsidiaries joint ventures or associate companies. Hence the requirement toreport on clause (ix)(f) of the Order is not applicable to the Company.
(x) (a) The Company has not raised any money during the year by way of initial publicoffer / further public offer (including debt instruments) hence the requirement to reporton clause 3(x)(a) of the Order is not applicable to the Company.
(b) As disclosed in note 8 to the financial statements the Company has complied withprovisions of sections 42 and 62 of the Companies Act 2013 in respect of QualifiedInstitutions Placement of equity shares during the year. The amount raised have been usedfor the purposes for which the funds were raised except for idle funds amounting to Rs196.10 crore which were not required for immediate utilization and which have beengainfully invested in liquid investments payable on demand. The maximum amount of idlefunds invested during the year was Rs 393.98 crore of which Rs 196.10 crore wasoutstanding at the end of the year.
(xi) (a) As represented to us by the management no fraud/ material fraud by theCompany or no fraud / material fraud on the Company has been noticed or reported duringthe year.
(b) During the year no report under subsection (12) of section 143 of the CompaniesAct 2013 has been filed by cost auditor/ secretarial auditor or by us in Form ADT - 4 asprescribed under Rule 13 of Companies (Audit and Auditors) Rules 2014 with the CentralGovernment.
(c) We have taken into consideration the whistle blower complaints received by theCompany during the year while determining the nature timing and extent of auditprocedures.
(xii) The Company is not a nidhi Company as per the provisions of the Companies Act2013. Therefore the requirement to report on clause 3(xii)(a) (b) & (c) of the Orderis not applicable to the Company.
(xiii) Transactions with the related parties are in compliance with sections 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in thenotes to the financial statements as required by the applicable accounting standards.
(xiv) (a) The Company has an internal audit system commensurate with the size andnature of its business.
(b) The internal audit reports of the Company issued till the date of the audit reportfor the period under audit have been considered by us.
(xv) The Company has not entered into any noncash transactions with its directors orpersons connected with its directors and hence requirement to report on clause 3(xv) ofthe Order is not applicable to the Company.
(xvi) (a) The provisions of section 45-IA of the Reserve Bank of India Act 1934 (2 of1934) are not applicable to the Company. Accordingly the requirement to report on clause(xvi)(a) of the Order is not applicable to the Company.
(b) The Company is not engaged in any NonBanking Financial or Housing Financeactivities. Accordingly the requirement to report on clause (xvi)(b) of the Order is notapplicable to the Company.
(c) The Company is not a Core Investment Company as defined in the regulations made byReserve Bank of India. Accordingly the requirement to report on clause 3(xvi) of theOrder is not applicable to the Company.
(d) As represented to us by the management the Group has 5 Core Investment Companiesas a part of the Group.
(xvii) The Company has not incurred cash losses in the current financial year andimmediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors during the year andaccordingly requirement to report on Clause 3(xviii) of the Order is not applicable to theCompany.
(xix) On the basis of the financial ratios disclosed in note 34 to the financialstatements ageing and expected dates of realization of financial assets and payment offinancial liabilities other information accompanying the financial statements ourknowledge of the Board of Directors and management plans and based on our examination ofthe evidence supporting the assumptions nothing has come to our attention which causesus to believe that any material uncertainty exists as on the date of the audit report thatCompany is not capable of meeting its liabilities existing at the date of balance sheet asand when they fall due within a period of one year from the balance sheet date. Wehowever state that this is not an assurance as to the future viability of the Company. Wefurther state that our reporting is based on the facts up to the date of the audit reportand we neither give any guarantee nor any assurance that all liabilities falling duewithin a period of one year from the balance sheet date will get discharged by theCompany as and when they fall due.
(xx) (a) I n respect of other than ongoing projects there are no unspent amounts thatare required to be transferred to a fund specified in Schedule VII of the Companies Act(the Act) in compliance with second proviso to sub section 5 of section 135 of the Act.This matter has been disclosed in note 20(a) to the financial statements.
(b) All amounts that are unspent under section (5) of section 135 of Companies Actpursuant to any ongoing project has been transferred to special account in compliance ofwith provisions of sub section (6) of section 135 of the said Act. This matter has beendisclosed in note 20(a) to the financial statements.
To the Independent Auditor's Report of Even Date on the Standalone Financial Statementsof PCBL Limited (Formerly Phillips Carbon Black Limited) Report on the Internal FinancialControls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")
We have audited the internal financial controls with reference to standalone financialstatements of PCBL Limited (formerly Phillips Carbon Black Limited) ("theCompany") as of March 31 2022 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to these standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing as specified under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls both issued by ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to these standalone financial statements was established and maintained andif such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to these standalone financial statementsand their operating effectiveness. Our audit of internal financial controls with referenceto standalone financial statements included obtaining an understanding of internalfinancial controls with reference to these standalone financial statements assessing therisk that a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to these standalone financial statements.
MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THESE STANDALONE FINANCIALSTATEMENTS
A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles.
A company's internal financial controls with reference to standalone financialstatements includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls With Reference to StandaloneFinancial Statements
Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols with reference to standalone financial statements were operating effectively asat March 31 2022 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note issued by the ICAI.
|For S. R Batliboi & Co. LLP |
|Chartered Accountants |
|ICAI Firm Registration Number: 301003E/E300005 |
|Per Kamal Agarwal Partner |
|Membership Number: 058652 UDIN: 22058652AHIPOJ1895 |
|Place of Signature: Kolkata |
|Date: April 19 2022 |